IRS generally failed to consider the taxpayer's perspective – what it is like to be a taxpayer
“It was clear that IRS employees and management felt enormous pressure to produce tangible enforcement results – assessments, collections, and penalties. IRS employees were unwilling or unable to take the time to talk with taxpayers or representatives. Instead, they moved cases along to the next level rather than working them completely at the point of first contact.
Most importantly, IRS employees generally failed to consider the taxpayer's perspective – what it was like to be a taxpayer in the crosshairs of the IRS.
I viewed this situation primarily as a management failure, exacerbated by vacillation on funding. That is, IRS management failed to provide the necessary oversight, guidance, training, and other tools vital for striking the correct all-important balance between collecting tax and assisting taxpayers. And Government, by withdrawing funding even as it placed greater expectations on the IRS for revenue collections, created further pressures on the IRS to produce.”
This is not about the Indian Revenue Service (though it very much looks so), but about the dreaded US Internal Revenue Service. These are the remarks of the US National Tax Payer Advocate Nina Olson in her report to the US Congress.
The Report adds,
Here are just a few of the provisions that make tax administration more fair and just:
1.The requirement that the IRS include an explanation of its entire examination and collection process (including information about the Taxpayer Advocate Service) in the first communication that provides the taxpayer with an opportunity to request an administrative Appeals.
2.The right to a Collection Due Process hearing prior to the first levy or within five days after filing of the first lien with respect to a tax liability;
3.Expansion of relief from joint and several liabilities on a married-filing jointly income tax return.
4.Additional taxpayer protections with respect to IRS seizures of residences and businesses, including the requirement that the IRS receive the written approval of a U.S. District Court judge or magistrate prior to seizure of a principal residence;
5.Additional safeguards with respect to the Offer in Compromise process, including the requirement of an administrative review and appeal of any rejected offer in compromise (or instalment agreement);
6.The establishment of a new basis for accepting offers in compromise on grounds of hardship, equity, and public policy;
7.Suspension of the statutory period of limitations during any period the taxpayer is financially disabled;
8.Extension of the common-law confidentiality privilege to federally authorized tax practitioners ( e.g., certified public accountants and enrolled agents) in federal civil tax proceedings;
9.Creation of a matching grant program for Low Income Taxpayer Clinics that provide free or nominal fee representation to low income taxpayers in tax disputes with the IRS or conduct outreach and education to taxpayers who speak English as a second language.
The IRS mission statement now reads as:
Provide America's taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.
Worth emulating by Indian Tax Administration. Incidentally in the US, the IRS Chief reports to the President while in India, the IRS chief reports to an IAS officer who is three years his junior.